• If a commodity has high use-value then it is not necessary that it will have a high exchange-value. But if a commodity has high exchange-value then it surely has some use-value.
• Exchange-value of a commodity is determined by the scarcity of that resource compared to its need/use.
• The demand of goods is raised when they have some use-value. If demanded goods are scarce in supply in relation to their demand or if their supply (i.c. availability in the market) is controlled by a few people then they have a higher exchange-value.

Example:

• Precious metals, diamonds, etc. have very high exchange-value.
• A contradictory situation is that if goods are highly useful i.e. have very high use-value and so have very high demand but have unlimited supply then they do not have exchange-value or may even have very low exchange-value.

Example:
(a) Though air and sunlight have very high usefulness for life, they have no exchange-value as they are abundant in supply.
(b) In earlier times, even water was considered a good with high use-value but no exchange-value. However, jn present times, the availability of water is reducing in relation to its need and use by people and so it has started commanding an exchange-value.

• In economics, use of the word ‘value’ is usually in context of ‘exchange-value’ of a commodity with another commodity.
• From this discussion we conclude that ‘value’ means the worth of one unit of a commodity in terms of units of another commodity in exchange.

Price:

• If a commodity is exchanged for money then such monetary exchange-value is termed as ‘price’.
• Price means the exchange-value (or worth) of a commodity measured in terms of units of currency.
  Goods and Services